Stock Rally Falters Near Record High as Oil Climbs: Markets Wrap
(Bloomberg) — A record-breaking rally in stocks took a breather as oil climbed after efforts to resume peace talks over the Iran war stalled, with traders bracing for a raft of megacap earnings and central bank decisions.
Following an advance that put the S&P 500 on pace for its best month since the depths of the pandemic, the gauge wavered. Brent crude topped $108. While a ceasefire has mostly held since early April, shipping blockades have cut daily transits through the Strait of Hormuz to near zero, prolonging the supply disruption that has jolted markets around the world.
The US and Iran failed to kick off a second round of peace talks this weekend despite a last-minute push by Pakistan, delivering a blow to Islamabad’s efforts to broker a settlement to end the two-month-old war.
Iranian Foreign Minister Abbas Araghchi told Russian President Vladimir Putin that bilateral relations will continue to be strengthened, according to Nour News. Putin expressed hopes that “Iranian people under management of the new leader will overcome this difficult period of tests and the peace will come,” Russian state TV showed in a live broadcast footage of the meeting.
Without much clarity on the geopolitical front, equity traders geared up for results from a handful of the world’s biggest technology companies.
Alphabet Inc., Microsoft Corp., Amazon.com Inc. and Meta Platforms Inc. are set to report Wednesday, followed by Apple Inc. a day later. Those firms are worth nearly $16 trillion combined, representing a quarter of the S&P 500’s market capitalization.
“With headlines on Iran continuing to provide mixed messages, our sense is that investors will shift their focus toward individual company results this week,” said Chris Senyek at Wolfe Research. “Along this vein, this week brings a ‘firehose’ of critical market data.”
The Federal Reserve, European Central Bank and peers in Japan, the UK and Canada are all scheduled to set interest rates this week, together deciding monetary policy for about half of the world’s economy.
While investors expect them to leave rates unchanged, markets will be alert to signs officials, including Fed Chair Jerome Powell and ECB President Christine Lagarde, are worried about the inflation threat posed by the biggest disruption to oil supply in history stemming from the US-Iran conflict.
“The tone of the press conference will emphasize the prudence of the ongoing wait-and-see stance, although we suspect that investors are nearing the point at which one might expect the Fed to have a stronger conviction take on the fallout from the energy shock – even if that is unlikely to be communicated in its entirety,” said Ian Lyngen at BMO Capital Markets.
Corporate Highlights:
Microsoft Corp. and OpenAI have agreed to drop the software giant’s exclusive right to sell the startup’s AI models, opening the door for the ChatGPT maker to pursue deals with cloud-computing rivals like Amazon.com Inc. Billionaire Bill Ackman’s IPO of his closed-end fund and his alternative asset management company is expected to raise about $5 billion, according to people familiar with the matter. Verizon Communications Inc. surprised analysts when it reported a gain of mobile subscribers, an early signal that new Chief Executive Officer Dan Schulman’s strategy for recapturing market share is already paying off. Domino’s Pizza Inc. sank after the company revised its full-year outlook and reported a first quarter comparable sales miss. Sun Pharmaceutical Industries Ltd. has agreed to acquire New York-listed women’s health-care company Organon & Co., expanding its global reach with one of the biggest outbound deals by an Indian company. Eli Lilly & Co. agreed to buy closely held Ajax Therapeutics Inc. for as much as $2.3 billion in cash, part of its effort to build out a portfolio of breakthrough cancer therapies. United Airlines Holdings Inc. Chief Executive Officer Scott Kirby confirmed he approached American Airlines Group Inc. and that talks have ended, laying out the virtues of a merger that he said could have strengthened corporate America and won approval from regulators. What Bloomberg strategists say…
“The lingering question for investors is whether all this spending on AI tech has produced tangible returns. The binary nature of this catalyst, which has singularly propelled equity gains this year, seems like an awfully shaky foundation for a sustainable stock rally.”
—Kristine Aquino, Macro Strategist, Markets Live. For the full analysis, click here.
Some of the main moves in markets:
Stocks
The S&P 500 was little changed as of 12:06 p.m. New York time The Nasdaq 100 fell 0.3% The Dow Jones Industrial Average fell 0.2% The Stoxx Europe 600 fell 0.3% The MSCI World Index was little changed Currencies
The Bloomberg Dollar Spot Index fell 0.2% The euro was little changed at $1.1733 The British pound rose 0.2% to $1.3554 The Japanese yen was little changed at 159.29 per dollar Cryptocurrencies
Bitcoin fell 1.8% to $76,832.56 Ether fell 3.7% to $2,277.02 Bonds
The yield on 10-year Treasuries advanced three basis points to 4.33% Germany’s 10-year yield advanced four basis points to 3.03% Britain’s 10-year yield advanced six basis points to 4.97% Commodities
West Texas Intermediate crude rose 1.8% to $96.13 a barrel Spot gold fell 0.8% to $4,672.76 an ounce ©2026 Bloomberg L.P.
